USDCAD: 1.3300 likely to be day’s pivotal point again
Yesterday’s signals produced a profitable long trade from the bullish engulfing candlestick structure which rejected the support level at 1.3277.
Today’s USD/CAD Signals
Risk 0.75% per trade.
Trades may only be entered from 8am London time until 5pm New York time today.
Long Trades
Long entry after the next bullish price action rejection following the next touch of 1.3277, 1.3241 or 1.3204.
Place the stop loss 1 pip below the local swing low.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
Short Trades
Short entry after the next bearish price action rejection following the next touch of 1.3345 or 1.3365.
Place the stop loss 1 pip above the local swing high.
Adjust the stop loss to break even once the trade is 20 pips in profit.
Take off 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to run.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
USD/CAD Analysis
I wrote yesterday that the round number at 1.3300 was quite likely to be the day’s pivotal point. I took no directional bias and I thought that the big U.S. inflation data release due later would probably make the direction of the price clearer.
I was wrong, it was the support level below that at 1.3277 which was the pivotal point, and it held, pushing the price up to the area of resistance which starts at 1.3345. The price has now fallen a little from there, but I could see the round number at 1.3300 now acting as probable support and holding the price again after a bearish retracement. The fact that we failed to get any bearish follow-through after the very strong downwards day at the end of last week suggests that the price is going to tend to move up.
A break above 1.3365 would be a very bullish sign. I would take a bullish bias if that happens, or if we get a strong bullish bounce following a retracement to either 1.3306 or 1.3277.
There is nothing important due today concerning either the CAD or the USD.